It's questionable whether today's escape is worthy of
, but it's one
would certainly be proud of. Stocks overcame early reticence to close with solid gains after the bond --
-- market held psychologically important levels.
Dow Jones Industrial Average
, once as low as 10,775.86, rallied for most of the afternoon and climbed into positive territory in the final hour to close up 69.30, or 0.6%, to 10,955.41.
The comeback was led by
, which finalized its plans for world domination, er, a takeover of
. Ma Bell (a.k.a. "Dr. No"), which rose 10.4%, also appears close to securing a major investment from that alleged monopolist,
, which gained 1.4%.
Other Dow gainers included
followed a path similar to the Dow's, closing up 15.31, or 1.2%, to 1347.31 after trading as low as 1317.41. The
rose 1.67, or 0.4%, to 434.26 after hitting an intraday low of 426.04.
Even more impressively, the
Nasdaq Composite Index
overcame a decline to as low as 2430.65 to close up 49.28, or 2%, to 2534.40.
TheStreet.com Internet Sector
index gained 22.36, or 3.6%, to 637.49 after trading as low as 580.82.
Among tech leaders,
rose 8% after reportedly ending merger discussions with
, which fell 3.2%.
were also winners among Nasdaq bellwethers; the
gained 2.8%. Chip and, especially, equipment makers were strong performers overall: the
Philadelphia Stock Exchange Semiconductor Index
The DOT, meanwhile, was led by
, up 22.3% thanks to an upgrade from
Warburg Dillon Read
rose 14.1% on speculation
may use its stake in @Home to pay AT&T for certain of its cable assets. Comcast jumped 14.6%.
rose 8.3% and 14.2%, respectively; each posted narrower-than-expected losses last night.
overcame a decline to as low as 133 7/8 to close up 2.5% to 146 1/2, just its second gain since April 23. Similarly,
rose 2.3% to 130 1/16 after trading as low as 115 1/2 while
closed up 1.3% to 161 5/16 vs. an intraday low of 148 7/8.
"The market started off very skittish because of the problems with the high-tech stuff," said Jim Volk, co-director of institutional trading at
, citing separate blowups in
, down 21.6%, and
, off 17.5%. "I think the whole key is the bond market. People were talking about the bond market tanking and they were nervous before the Treasury refunding announcement, which was at the high end at $27 billion. When the bond market held, stocks started acting all right."
The price of the 30-year Treasury bond rose 5/32 to 93 17/32, its yield dipping to 5.70%.
Equities will remain captive to bonds for the short term, Volk said, but "I still think the bull story is intact." The trader was impressed by the comeback today and observed volume was diminished early on as stocks struggled.
New York Stock Exchange
trading, 898.5 million shares were exchanged while gainers overtook losers 1,554 to 1,419. In
Nasdaq Stock Market
activity, 1.04 billion shares were exchanged while declining issues led advancers 2,094 to 1,947. New 52-week highs led new lows 62 to 17 on the Big Board, but new lows led 62 to 57 in over-the-counter trading.
Good, but Not Gangbusters
Volume picked up in the final hour of trading to close at very respectable levels, but "had volume expanded more" the reversal "would have been more impressive," said Greg Nie, chief technical analyst at
. "It did get a little more active late in the day, but it wasn't gangbusters. This still looks to me like a market that's poised to digest the April gains and remains somewhat stretched out and a bit overbought."
Nie is far from bearish, however, expecting merely a "little bit of a timeout" vs. a big downturn in the major averages. As for the major averages, Nie refuted the observation of some other market watchers that 2500 is a key technical level for the tech-infused index. Rather, 2400 has "more substantial support," he said.
Like just about everyone else, the technician says the bond market is the "wild card" in the stock market's short-term hand.
"There's a tremendous focus on the employment data on Friday," he said. "The bond June futures contract is still on shaky, shaky turf. Any weakness will spill quickly into equities, and be a convenient excuse for the market to selloff."
Among other indices, the
Dow Jones Transportation Average
rose 3.38, or 0.1%, to 3735.26 vs. an intraday low of 3669.86; the
Dow Jones Utility Average
gained 1.55, or 0.5%, to 314.87; and the
American Stock Exchange Composite Index
shed 0.21, or 0.03%, to 785.49.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
fell 31.14, or 0.44%, to 7023.62. Mexican markets were closed for the Cinco de Mayo holiday, which marks the Mexican victory over invading French forces at the Battle of Puebla in 1862.
Wednesday's Company Report
Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.
AT&T rung up 5 3/8, or 10.4%, to 56 15/16 after forging a deal with Comcast to avert a bidding war for MediaOne. A customer swap with Telephone will give Comcast 750,000 additional subscribers -- and ultimately 2 million more on top of that -- in exchange for offering AT&T telephone service to its customers and walking away from its MediaOne bid. Comcast rose 9 5/16, or 14.6%, to 73 5/16; MediaOne lowered 3/4 to 76 7/8.
Separately, AT&T is negotiating a deal that would involve
paying about $5 billion for a 2% to 3% stake in the company in return for AT&T's agreement to use the
operating system in its new digital services packages, according to
The New York Times
. Microsoft picked up 1 1/16 to 79 1/8.
Elsewhere in merger news (or non-merger news, as the case may be), Nextel shrunk 1 3/16 to 35 7/8 after MCI WorldCom ended talks to acquire the company when the two failed to agree of terms of a deal. Nextel is the last independent U.S. wireless phone company with a national network. MCI WorldCom popped up 6 5/8, or 8%, to 89 5/8.
Mergers, acquisitions and joint ventures
expanded 2 13/16, or 12%, to 26 5/16 after saying
will deploy Ciena's network capacity-increasing technology in its core network. Bell Atlantic tacked on 1 to 58 3/8.
Procter & Gamble
slipped 9/16 to 91 3/16 after saying it might sell its Prell hair care brand.
Earnings/revenue reports and previews
Alternative Living Services
tanked 10 1/8, or 46%, to an annual low of 11 7/8 after last night saying it sees 1999 earnings of $1 to $1.10 a share and 2000 earnings of $1.40 to $1.60 a share. The 20-analyst outlook calls for 1999 earnings of $1.44 and a 15-analyst outlook calls for 2000 earnings of $1.90.
cut Alternative Living to near-term neutral from accumulate while maintaining its long-term buy.
BT Alex. Brown
dropped the stock to buy from strong buy.
BancBoston Robertson Stephens
lowered it to long-term attractive from buy.
Autodesk skidded 5, or 17.5%, to 23 9/16 after warning of first-quarter pro-forma earnings of 10 cents and 15 cents a share and diluted earnings of 2 cents to 5 cents a share. The 10-analyst view called for a profit of 40 cents vs. the year-ago 55 cents.
cut the stock from market outperformer to market performer, and
Dain Rauscher Wessels
reduced it from buy to hold.
climbed 1, or 5.5%, to 19 1/8 after last night posting first-quarter earnings of 11 cents a share, in line with forecasts. BT Alex. Brown raised the stock to buy from market perform.
egghead.com swelled 1 1/8, or 8.3%, to 14 11/16 after last night posting a fourth-quarter loss of 50 cents a share, 6 cents narrower than the five-analyst forecast and better than the year-ago loss of $1.51.
grew 1 3/8, or 7.9%, to 19 after last night saying its first-quarter same-store sales surged 15.3%.
gave up 3/8 to 13 3/16 after reporting first-quarter earnings of 20 cents a share, 2 cents under the 14-analyst call and down from the year-ago 30 cents.
added 9/16 to 75 1/8 after reporting first-quarter earnings of $1.54 a share, well below the single-analyst forecast for $2 but above the year-ago $1.43.
Magellan Health Services
shot up 1 9/16, or 30.5%, to 6 11/16 after posting second-quarter earnings of 21 cents a share, in line with the five-analyst forecast and up from last year's 15 cents.
jumped 3 1/16, or 20.9%, to 17 11/16 after saying it will record a fourth-quarter charge of $250 million to $300 million to exit the PC processor business and cut 550 jobs.
Newbridge Networks plunged 7 15/16, or 21.6%, to 28 7/8 after preannouncing last night that its fourth-quarter earnings will be 12 cents to 14 cents a share, well shy of the 15-analyst forecast of 21 cents vs. the year-ago 12 cents.
Class B shares of
PacifiCare Health Systems
advanced 13 7/8, or 17.4%, to an all-time high of 93 13/16 after reporting first-quarter earnings of $1.61 a share, bludgeoning the 16-analyst estimate of $1.28 and moving up from the year-ago 90 cents. PacifiCare also set plans to combine its two classes of common stock and buy back 5.9 million shares.
Policy Management Systems
fell 2, or 5.8%, to 32 3/4 after last night reporting first-quarter earnings of 37 cents a share, a penny short of estimates.
priceline.com vaulted 18 3/4, or 14.2%, to 151 3/16 after last night reporting a quarter loss of 12 cents a share, a penny narrower than the five-analyst outlook. Revenue rose 160% from the fourth quarter.
picked up 1 5/16 to 41 1/2 after posting first-quarter earnings of 65 cents a share, 3 cents above the 11-analyst consensus and up from the previous year's 51 cents.
lifted 1 1/2, or 5.5%, to 29 1/8 after
started coverage with a buy.
Infoseek leapt 10, or 22.3%, to 55 1/8 after Warburg Dillon Read raised the stock to buy from hold and set a price target of 70 to 75 a share.
excelled 5, or 9.3%, to an annual high of 58 3/4 after saying it will beat its goal of 1 million digital TV subscribers by October. The company also set plans to quicken the transition to digital TV by giving away its